S&P rates EuroChem notes BB-

S&P said it affirmed the BB- long-term corporate credit rating on EuroChem Group AG, along with its ruAA- Russia national scale rating.

The outlook is stable.

S&P also said it assigned a BB- rating to the up to $750 million proposed senior unsecured notes issued by EuroChem Global Investments DAC and guaranteed by EuroChem Group.

The ratings reflect an expectation that EuroChem's lower-than-forecast EBITDA of about $1.1 billion due to lower fertilizer prices will be balanced by eliminating dividends, reduced capital expenditure and availability of a $1 billion perpetual shareholder loan, which should be put in place soon.

EuroChem will continue to invest about $1 billion to $1.1 billion annually in capital expenditure, S&P said.

The company’s adjusted debt will remain close to $3.5 billion in 2016 and will increase slightly in 2017, the agency said.

The ratings also consider an opinion that EuroChem is proactively managing its refinancing risks, having put in place a $800 million pre-export finance facility in September 2016 and issuing the senior unsecured notes, S&P said.

The ratings remain supported by EuroChem's strong cost position on the back of the weaker ruble, the agency added.

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